4 ms·
Common pricing strategy is to have 3 price points: 1. a cheap stripper model used to bring people into the showroom 2. an expensive deluxe model with every be
by skookumchuck 9y ago
Common pricing strategy is to have 3 price points:
1. a cheap stripper model used to bring people into the showroom
2. an expensive deluxe model with every bell and whistle. It's primary purpose is to frame the next one as being affordable:
3. the mid-price mid-range one you're expected to buy.
Of course, the price-is-no-object people will buy (2) anyway, and that's just extra gravy.
You'll see this technique used across all sorts of product lines.
- sah2ed 9y agoAlso called price anchoring [0] in marketing. [0] https://en.wikipedia.org/wiki/Anchoring https://en.wikipedia.org/wiki/Anchoring
- astrobase_go 9y agoindeed; for those who may not be familiar, see 'behavioral economics' [0] for the ways that known quirks in human reasoning can be used to game consumers. don't buy a house without learning about it. there are two great books I recommend for those interested: predictably irrational [1] and the upside of irrationality [2]. personally, I think the first is better than the second as a layman's introduction to it. [0] https://en.wikipedia.org/wiki/Behavioral_economics https://en.wikipedia.org/wiki/Behavioral_economics [1] https://www.amazon.com/Predictably-Irrational-Revised-Expanded-Decisions/dp/0061353248 https://www.amazon.com/Predictably-Irrational-Revised-Expand... [2] https://www.amazon.com/Upside-Irrationality-Unexpected-Benefits-Defying/dp/0061995045 https://www.amazon.com/Upside-Irrationality-Unexpected-Benef...
- chaseha 9y agoyou mentioned real estate - do you know of any books/articles that delve into behavioral economics from a homebuyer's perspective?
- david-cako 9y agoAs an extension, I suspect that the extreme initial price reports (base model iPhone X at $1300 at one point?) are another form of anchoring. Apple is likely intentionally desensitizing people to the price.
- dhimes 9y agoMy understanding was the USD $1K mark was for the cheapest. If they were introducing a luxury version I wouldn't be so upset.
- alistairSH 9y agoI thought the rumor-mill had Apple introducing two phones tomorrow - the 7 replacement AND the expensive phone. The naming conjecture has muddled the discussion a but, I think.
- dhimes 9y agoI see. I guess I was confused by this: (FTA:) "The company will also enter new territory on price: The latest phone will start at about $1,000, compared with the $769 minimum for its current top phone, the iPhone 7 Plus." So they are comparing 'top' to 'top' here. Got it.
- alistairSH 9y agoYeah, I think that's just comparing current top to new top. My guess is we get a 7 replacement (named 7S or 8) and an ultra-premium (named 8 or iPhone Edition). Or, maybe not, and there is no real 7 replacement. Just the ultra-premium, and the 7 stays on as the mid-level, maybe with $100 price reduction (and the 6S is retired).